Tag Archives: ethics

In this post, Sol Picciotto, Emeritus Professor of Lancaster University, provides an update on developments pertaining to the case of Rudolf Elmer which he wrote about in a chapter from the recently published The New Legal Realism Volume II: Studying Law Globally.

My chapter on “The Deconstruction of Offshore”, in the book The New Legal Realism 2: Studying Law Globally used the personal story of Rudolf Elmer to open up some of the fascinating story of the construction and more recent deconstruction of the offshore system.

Elmer is one of several whistle-blowers whose revelations have helped to spotlight some of the otherwise arcane practices of avoidance of tax and other state regulatory requirements developed mainly by lawyers, which helped to shape 20th century transnational corporate capitalism.

My chapter began by noting that of 28 encounters with the Swiss courts, Elmer had lost 27 of them. However, the final decision of the High Court of Zurich dated 19 August 2016 was forced to substantially exonerate him. The court conceded that Elmer was not guilty of breaking the strict Swiss bank secrecy law, since he was actually employed by an entity formed in the Cayman Islands. There is an obvious rich irony here, since this was a subsidiary of the Julius Baer Bank, formed to help its clients avoid tax and other laws, yet the Baer Bank was the main complainant in the case against him. Furthermore, a strongly worded report in the Sonntagszeitung of 30 July 2016 castigated the conduct of the case by the prosecutors, who had failed to disclose documents proving Elmer’s employment status.

Rudof Elmer at the Press Conference of Wikileaks in the Frontline Club, January 2011.

In fact, the Baer Bank has had a bad year. As Forbes reported back in February, two of its bankers pleaded guilty, and the Bank itself admitted that it knowingly assisted U.S. taxpayer-clients in evading taxes, agreeing to pay $547 million in a deferred prosecution deal.

The revelations have not been confined to Switzerland, which is just one node of the offshore secrecy system. In April the world was rocked by the publication of the Panama Papers by the International Consortium of Investigative Journalists. These contained files and emails from the prominent Panamanian lawyers Mossack Fonseca, detailing some of their work for clients around the world. Elmer himself recorded some comments on the implications.

This publicity contributed to the public pressures forcing world leaders to deliver on their promises to end the abuse of this secrecy system. Panama agreed in October to sign up to the OECD’s multilateral convention on assistance in tax matters (although it must still ratify the treaty), and to commit to implement automatic exchange of tax information by 2018. There are still significant gaps: notably the US still stands aside from this multilateral framework, relying on the network of bilateral agreements it has fashioned under the Foreign Account Tax Compliance Act (FATCA), even though many of these are not fully reciprocal. Indeed, the US itself remains in many ways an important secrecy jurisdiction for non-US citizens. Research has shown how easy it is to set up a shell company in the US, and state legislatures are resisting pressures to introduce shareholder registration rules. Despite ringing statements that “the era of bank secrecy is over”, although considerable progress has been made, there is still some way to go.

In recent months, prompted by media coverage of research by sociologist Alice Goffman, a number of law professors have stumbled upon a longstanding set of questions surrounding social science ethics. These questions, which I first encountered during my Anthropology 101 class in the 1970s, are obvious concomitants of any form of deep, long-term observational research. Anthropology has long been a leader in a form of that research known as participant observation, the results of which are generally reported in ethnographic writing. One of the most striking aspects of the current exchanges — to this anthropologist/law professor’s ear — is the assumption made by some that a superficial glance at one high-profile case suffices to identify where key problems lie (see, for example, some of the exchanges on a well-respected law professors’ blog, The Faculty Lounge.) My esteemed former colleague Stephen Lubet even went so far as to comment that: “It seems that the field of ethnography ethics is seriously undertheorized,” without any citation to the voluminous literature involved, let alone any consultation with the many scholarly experts in this area.

He further promised to spend the summer researching this, in his view, previously untrod ground. This led me to once again contemplate differences in research strategy between some (not all) trained in law, and most (not all) trained in social science. My own training, and that of most I know who are trained social scientists, is to begin with an assumption that there is much to learn. This assumption also carries with it a form of humility that is part of stringent method: I don’t assume that I can quickly grasp a complex area. In keeping with this approach, if I were going to study the ethics of ethnographers, I would not focus on the unusual high-profile case that grabbed media attention, but rather on standard practices. I’d want to know about common ethical dilemmas facing all kinds of field researchers, and the history of how disciplines had dealt with them. Of course, since observational researchers tend not to trust self-reports, I’d want to spend some time actually observing ethnographers over substantial periods of time. I’d want to learn about ethics training for incipient fieldworkers. And I’d excavate thoroughly what is already known, talking with experts from the field in question who know far more than I do about the current state of affairs.

The situation, mentioned above, that was described by my introductory anthropology course professor (all too many years ago now!), involved a mother about to give birth to twins in the village where my professor was conducting long-term ethnography. The practice in that village, as she described it, was to kill one of the twins immediately after birth. The villagers knew that this was frowned on in the Western-style colonial legal system that could formally be enforced against them. My teacher described the dilemma she faced in deciding whether to intervene or not — a dilemma that was resolved when the family opted not to follow traditional practices (possibly because she was present as a potential witness).

In these oddly jaded times within the social sciences, it is interesting how controversial a claim to be capturing “reality” can be. Of course, this is not surprising. One of the key jobs the social sciences can perform is to keep us from too easily accepting commonly accepted “truths” that are in fact false, or perhaps just very dubious or impossible to prove. Even the very positivist field of forensic psychology at times sounds oddly postmodern in its denial of any fixed “truth” – we know a lot more about what can cause false identifications or memories than we know about accuracy, as if there are no accurate eyewitness identifications or memories of abuse. Again, there is a good reason for some of this: we now know that many people have been unjustly jailed, even sent to death row, based on false identifications and evidence. At the same time, reading this literature, one sometimes feels a sense of vertigo, as if these hard-nosed empiricists have actually given up on there being any accurate memories or actual “reality” that happened at all – although of course, their own work depends on their own abilities to remember and code and identify some kind of empirical “reality” with accuracy – as does so much of the fabric of social life.

In the more qualitative areas of social science, as in my own home field of anthropology, this discomfort with identifying “truths” and fixed realities has reached high levels – again for very good reasons. Too often the “realities” fixed by cross-cultural encounters have been based in the self-serving perceptions of Westerners engaged in colonial or post-colonial adventures designed to impose their norms (and profit-margins) on people with less power but much wisdom, so frequently ignored and lost in the transactions. The realization that anthropology itself had been complicit in these impositions froze the field in its tracks in many ways, and plunged it into a sometimes-productive, sometimes-infuriating phase of epistemological questioning. (I may be prejudiced, but I do think that this phase has left the field well-placed to help in the cross-cultural translation processes now becoming so ubiquitous in an era of concern with the “global.”) Again I just note that while questioning is very important, if we generate only critique, we are unlikely to be able to contribute to activist attempts to improve the frequently very dismal situations being studied – and this ought to raise some ethical issues for us.

Moving then to law, that very applied arena of social studies, it is perhaps surprising to encounter yet more agnosticism about “reality” – and I can only repeat, once more for terrific reasons. What other field has the awesome task of deciding the fate of accused human beings, of jailing them or even killing them? In the hands of legal decision-makers can rest the fates of businesses and churches; of children, abused women, the wrongly accused, and the mentally ill. When juries or judges find “facts,” on the way to making decisions, they are ringed around with procedures that limit the scope of their inquiries – in a sometimes successful, sometimes terribly wrongheaded effort to keep out factors that are deemed wrongly prejudicial or inflammatory, and so forth. This means that the truth that emerges from legal decisions can never claim to be the “actual reality,” but only the “facts” as framed very particularly in this legal proceeding.